(RTTNews) - Cloudflare, Inc. (NET), a connectivity cloud company, on Tuesday said it has priced $2.175 billion, 0% convertible senior notes due 2031 in a private offering.
The company also granted the initial purchasers an option to buy up to an additional $325 million of the notes.
Cloudflare expects to receive approximately $2.14 billion in net proceeds from the offering, assuming the option is not exercised. The company plans to use about $225.8 million of the proceeds to pay the cost of capped call transactions entered into in connection with the offering. The remaining proceeds will be used for general corporate purposes.
The sale of the notes is expected to settle on August 13, 2026.
The notes will be convertible at an initial rate of 2.0123 shares of Class A common stock per $1,000 of notes, equivalent to an initial conversion price of approximately $496.94 per share. This represents a conversion premium of about 60% over Cloudflare's last closing price of $310.59.
The initial cap price is approximately $854.12 per share, about 175% premium over the company's last closing price.
Cloudflare shares were down 0.14% in pre-market trading after closing at $310.59 on Monday.
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